From Peter Reagan
This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: Mining industry veteran says gold is going to $2,000 next year, Indian silver demand hits all-time records and Chinese gold appetite climbs to five-year highs.
Gold to surge above $2,000 next year over Fed policy reversal
Jake Klein, executive chairman of Australia’s Evolution Mining, believes gold will take a somewhat slow and steady approach toward a $2,000/oz price. While some are forecasting that gold will explode past this level this year, Klein expects a little time to be needed for Federal Reserve policy reversals to have their effect on the metal.
What has long been speculated now appears to be materializing to an extent. The latest Fed meeting may have hinted towards an easier monetary policy, whether that means a tempering or altogether cessation of interest rate hikes. While Fed officials did reiterate the dangers of high inflation, they also mentioned not wanting to slump the economy with excessive tightening.
Klein says that a high inflation rate is going to be something the markets will become used to. Needless to say, with gold being the premier inflation hedge, this bodes exceedingly well for the metal’s prospects. Troy Gayeski, an asset manager with FS Chiron Capital Allocation Fund, feels that aggressive easing is on the table. Though there might still be a pullback in the gold market beforehand, Gayeski told Bloomberg that easing will most likely spur his fund to increase their exposure to gold.
Gayeski took particular note of gold trading around and often holding above $1,800 despite what one might call historic (however temporary) strength in the U.S. dollar. Like other analysts, he finds gold’s resilience in the face of extreme tightening bullish, and says it will translate very well to gold’s next upward price run.
Fortunately for Americans, there’s still a little time left to make the most of the dollar’s transitory strength. Other countries have already seen their currencies wane, and their citizens are taking the appropriate steps…
India to see record silver imports this year
India, along with China, is known as one of the two largest sources of gold demand. According to latest reports, however, market watchers might soon realize that gold isn’t the only precious metal in favor with Indian investors. Imports of silver to the world’s largest democracy are on track to triple compared to a year ago, partly due to silver prices recently reaching a two-year low.
Chirag Thakkar, CEO of Amrapali Group Gujarat, one of the country’s main silver importers, said investment demand has played an important role in India’s incredible surge in silver imports. Thakkar noted some investors are betting on silver outperforming gold in the short term:
Investors are anticipating poor man’s gold will beat gold in coming years.
Thakkar projects that Indian imports of silver could jump to an all-time record high of 8,200 tons this year.
There is no shortage of data to support this forecast. The Ministry of Commerce and Industry said that imports in the first seven months reached 5,100 tons, an astonishing 4,536% increase year over year. The CEO said that imports are rising as fast as they are because heightened demand colliding meeting a general inventory depletion in the nation.
A Mumbai-based silver dealer who spoke to Reuters also highlighted the country’s industrial demand as perhaps an equally strong driver of imports:
Electronics, solar panel manufacturing have been increasing because of the government incentives. These industries are consuming more and more silver along with the auto industry.
India has its own take on the global green energy bid, offering production incentives for manufacturers of electronics and solar panels, both of which make heavy use of silver. The dealer also took note of premiums over spot price surging fairly sharply, with banks and retailers charging significantly over global prices. “Last year gold was trading in premium and silver in discount. Now exactly the opposite is happening,” he explained.
And it isn’t just India’s citizens looking to secure their purchasing power with physical precious metals…
Chinese gold buying storms global markets, soaring to 5-year highs
India might be beginning to appreciate silver as a “poor man’s gold,” but it seems that China is sticking to the real thing. The appetite for lockdowns on behalf of the Chinese government is legendary, with the Asian nation having persisted while most other countries significantly eased their restrictions.
Any easing in China appears to have an immediate and strong effect on gold demand, and the latest report was no different. In July, China imported 80 tons of gold, double June’s imports and eight times May’s import levels.
July’s numbers are a five-year high, with the gold coming into the nation being refined in Switzerland. Another reason for such a large increase in imports likely has to do with local premiums, as sellers are charging $7/oz over global prices. If nothing else, such premiums over spot price should remind us of the difference between physical and paper gold.
Although premiums in other Asian nations sometimes climbed to $2 over global prices, traders noted that volume and activity has been somewhat mild. One trader from Japan attributed this to the summer holiday season, stating that retail investors will likely make the most of any dips in gold’s price (the smart ones, at least!) The trader said that gold could start picking up the pace as soon as next week.
If this Asian gold market veteran is correct, we have a very limited window to make the most of transitory dollar strength and buy the most gold for our investing dollars…
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When millions of Chinese realize their eventual life savings investments in ghost cities goes bust, they may switch to gold as the investment of choice.
Same here. When the stock market tanks, gold will be one of the commodities worth owning.
“they may switch to gold”
be better off with a couple pallets of rice.
Gold $3K and Silver $100 – yeah, yeah! Been hearing this for 10 years. Wake me up if they even get close!!!!!
Been hearing that for 20 years.
The powers that be will never cut either metal loose!
Big deal! Central banks continue to print trillions. Trillions. And we are celebrating gold at $2,000? Its a rigged game. All of it. People on this site should KNOW that by now. Frank Zappa knew what he was talking about.
Yep, I should have started growing dental floss in Montana.
Yay! Gold where surge past where it was in 2011. Not adjusted for inflation of course.
lol If I handn’t lost it all to a boating accident, I would still be down on Ag, not Au. Maybe we get to 1200 again. Suits me fine. Wish the pounds would pound down like they should.
I had a ill advised (by some) precious metals mutual fund once. It tanked about 5 grand on a 10K “investment”, I waited and it netted me almost 4 but of course fiat. It took some years to recover the negative investment. Gold had gotten up to around $1900 or close to when I said enough is enough on the precious metals mutual. I took the fiat $$ and ran. Good thing as I have doubts about mining gold now.
I will likely never buy physical gold. I’m thinking should the ultimate SHTF occur like the SHTF I’ve read about for 15 years, junk silver coin may be a better barter source. That’s why I decided to hold on to the dimes. No sense in bartering a Franklin for a home baked loaf of bread when one or two dimes will probably do the trick. And I say home baked because if the ultimate SHTF takes place will there even be what we now call a “loaf of bread”? Doomsday…
The FOMC is NOT going to reverse policy. We are in for a generational change to higher rates for quite some time now. All western nations have started, led by the FOMC.
Gold may go up like in the late ’70s or maybe it won’t. Over long term charts, PM’s tend to go down when USD strength goes up. The difference this time is that the USD is losing some of it’s mojo as the only reserve currency. At the current geopolitical financial time, USD is still king, but steps are being taken to make it share some of it’s high perch. I am no forecaster, other than to say these times they are a changing.
Your prediction is why I bought our house when I did. Money markets will not reflect it.
https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart
ken,
I’m probably one of the most regular positive PM posters on TBP.
My first thread in 2018 was in partnership with Maggie based on selling a stock 401k in 99 (I was 49) paying the taxes (including the 10% penalty) paying off some debt, and putting most of it into Gold and Silver. A contrarian move that some thought I was crazy for doing, I was even laughed at once by my daughters future father in law – turned out to be one of the most profitable moves I have ever done.
When gold dropped to around $1,200 in 2018 my wife and I were hoping to start building our dream home soon, and we did in 2020. I told her I wanted to take a big chunk of it and buy some more gold to hold for a short time, I was positive that it would rise back up once the Banksters/riggers shook out all the armatures and margin players. I did and sold it less than two years later at close to $2,000. We made a huge profit that we folded into the house.
Right now I believe everything Nenner says about the coming Stock Market collapse, but especially his predictions on Gold and Silver. Matter of fact Silver has much more upside than Gold, but the premiums are super high.
The thing to me about gold, silver and other precious metals in the physical form is to what “value” they will be tied. We talk about the price of such now but tied to the dollar. Should we barter for a loaf of home baked bread “how much” does anyone know how much the barter is “worth”. I guess if bartered it is “worth” a loaf of home baked bread.
“does anyone know how much the barter is ‘worth’”
whatever you can get. and not a penny more or less.
and it’ll be local/temporal. in some places a loaf of bread will get 1 oz gold and in other places 1/10 oz silver. a year later that might be reversed.
“Silver has much more upside than Gold”
above ground gold: 4.5 billion ounces
above ground silver: 1 billion ounces
You have any sources for your numbers g-man/rant-7?
https://sdbullion.com/blog/how-much-silver-gold-is-there
“Silver is different from gold in the sense that it has many more industrial uses (second only to crude oil in real-world product applications). Thus, the vast majority of all the physical silver we humans have ever mined has been exhausted through industrial applications, thrown out into landfills unrecovered.
Data on silver mining shows that, by 2018, just over 1,600,000 tonnes of physical silver had gotten mined all-time.
Again, in case you didn’t know, 1 ton is equal to 32,150.7 troy ounces.
Thus there have been just slightly more than 50 billion troy ounces of silver mined in history. Again, most physical silver mined over time has been lost to industrial use and gone unrecycled”.
As I said Silver has much more obvious upside than Gold in the future…but just to re-state the obvious for those who are thick as a brick:
1. Water
2. Food/Food Production
3. Shelter
4. Essentials
5. Guns/Ammo – Training – Defense/Offense Capabilities
6. Medical
7. Barter
8. Community/Tribe
9. Communication
10. Plan B & C
11. Cash (It looks during a credit freeze AKA a liquidity crisis (that it looks like we are heading into) at least a couple/three months of cash (stashed at home) make a tremendous difference.
12. Silver (pre 64 junk dimes, quarters, & 1 oz. American Eagles)
13. Gold (only if you have wealth, buy it in all values from 1/10 of an ounce to 1 oz.
Yea 12 and 13 may not be needed at first, but nothing lasts forever, including every single crash in history, and if you don’t have real wealth, and have not completed 1 through 11 in depth you do not spend what you don’t have (wealth) on gold.
Precious metals are not either or they are part of complete Prep…until after the first 11 are secured.
Hello…g-man/rant-7? cS…numbers sources????
Hello???
Tomorrow is a BIG celebration day! Its National 401k Day. All these “recognized” days slay me. Next thing you know “they” will create a National Constipation Day advising how to get over that which I don’t have thankfully. Just saying, all these “days”. Recently it was National No Rhyme (Nor Reason ) Day.
above ground gold: 4.5 billion ounces
above ground silver: 1 billion ounces
plan accordingly.